Poverty Reduction in the New Asia and Pacific: Key Challenges of Inclusive Growth for the Asian Development Bank

Abstract

The international Forum on “Inclusive Growth and Poverty Reduction in the New Asia and Pacific” was held in Manila on 8–9 October 2007. The forum’s overall conclusion was that there is a pressing need for transformation within the Asian Development Bank (ADB) and better alignment of inclusive growth as strategic goal with the operational activities and internal capabilities so that the institution can continue to play an important role in supporting Asia’s socioeconomic development. The conference is of strategic importance for ADB’s new longterm strategic framework discussions. This paper summarizes the strategic discussion as highlighted in the keynote address by Michael Walton. It argues that growth needs to be inclusive to be sustainable and to be accepted by the population. The Asia and Pacific region, with its rising inequalities, has somewhat lost the inclusive growth path of its past. This gives new opportunities for ADB as the regional development bank to bundle knowledge and finance in areas where both the governments and markets fail. In poorer countries, this will often involve continued support to central governments in the provision of infrastructure and social services. In emerging market countries, this will increasingly involve a mix of financial and knowledge-related services that tackle the more complex challenges of inclusion of lagging regions or groups in both social and economic development, developing comprehensive mechanisms for managing security, financial inclusion, and the management of environmental concerns. However, to remain relevant for the region, ADB urgently needs to transform itself quickly to better align the strategic development goal of poverty reduction through making growth inclusive with its internal capacities.